Lagos — Kenyan stocks could maintain a positive momentum, as the NSE20 share index closed 0.44% higher on Wednesday.
The market showed strong performance in the consumer durables, retail trade, and non-energy minerals sectors, advancing by 9.79%, 7.16%, and 1.6%, respectively. Consumer services also saw a gain of 1.21%.
However, commercial services, producer manufacturing, and consumer non-durables experienced declines of -6.49%, -4.55%, and -2.08%. The performance in the consumer sectors reflects continuous investor optimism, providing a foundation for further upside in the broader market.
This positive sentiment follows the Central Bank of Kenya’s decision to reduce its benchmark interest rate by 50 basis points to 10.75%, marking the fourth consecutive rate cut.
The move reflects expectations that inflation will remain below the 5% target, supported by stable core inflation, low energy prices, and a stable exchange rate. January’s inflation rate stood at 3.3%, with core inflation at 2%. Additionally, the reduction in the cash reserve ratio to 3.25% aims to stimulate economic activity.
These measures are expected to strengthen domestic equities by lowering borrowing costs, improving liquidity, and potentially contributing to an environment that supports corporate earnings, particularly in consumer-driven sectors.
*Daniel Wesonga, Senior Sales Manager at Pepperstone
